Large Crowds Indicate Las Vegas Is Recovering Sooner Than Expected

Posted on: April 8, 2021, 03:17h. 

Last updated on: April 8, 2021, 03:28h.

Larry Henry Read More
Expertise: Commercial Gaming, Gaming Business, Legislation, Politics, Regulation.

As the national vaccine rollout continues, Las Vegas hotels are filling up after a year-long slump, indicating a rebound might be occurring faster than anticipated.

Las Vegas Crowds
Crowds gather in downtown Las Vegas, left, and on the Strip in mid-March. On May 1, gaming regulations could allow casinos to exceed the current 50 percent capacity limit. (Image: New York Post)

A report this week from the investment firm Morgan Stanley shows that weekend hotel occupancy rates in Las Vegas are at about 95 percent, according to the Las Vegas Review-Journal. This figure is encouraging for tourism-dependent Southern Nevada, which has struggled since the March 2020 onset of the coronavirus pandemic.

The midweek occupancy rate is between 50 and 60 percent, much higher than the pandemic levels of below 30 percent. Last year, several resorts stopped taking hotel reservations during the middle of the week because of low consumer demand. Some of these, including the Palazzo at the Venetian, have now begun accepting midweek reservations again.

Gaming experts see this and other indicators as signs that the uptick in visitor volume points to an earlier-than-expected recovery. This is happening as COVID-19 vaccines have become widely available. An estimated 4 million adults are being vaccinated in the US each day.

Barry Jonas, a Truist Securities analyst, told the newspaper a gradual turnaround became evident at the first of the year.?

“January, there were some improvements,” he said. “February, probably OK. But March appears to really be seeing strength in Vegas, as well as across the country, at least anecdotally from companies.”

‘Cabin Fever’

The Morgan Stanley report indicates visitors are continuing to choose Las Vegas as a destination. Foot traffic on the Strip in March was almost 60 percent of what it had been before the first COVID-19 cases surfaced, the newspaper reported.

This trend is holding up even after the spring break crowds have gone home and the NCAA men’s basketball tournament, always a big draw in Las Vegas, has ended.

The Morgan Stanley report notes that future room reservations are “stronger than current occupancy” at some hotel-casinos.

The larger crowds are noticeable. On the Review-Journal Facebook page, a social media user identified as Al Tilley says in the comment section of one post that this influx is no surprise.

“Imagine an entire country cooped up for months with cabin fever and stimulus checks,” the user wrote. “Adult Disneyland was never more needed.”

Pressure to Vaccinate Employees?

Casino officials are hesitant to wave the victory flag. A surge in COVID-19 cases, or the presence of coronavirus variants, could spark public concern again about traveling.

Cultural shifts also could have an impact on the number of people who show up for conventions and special events. These events are seen as vital in filling up the massive hotel towers in Las Vegas, especially during the slow middle of the week.

Some business analysts expect companies now accustomed to Zoom meetings to scale back on costly business travel and convention junkets.?

Kevin O’Leary, a venture capitalist and panelist on the television show Shark Tank, recently said on CNBC that business travelers in the future will need a strong reason for why the trip is necessary.

State gaming regulators also are putting pressure on hotel-casinos to show progress in getting their employees vaccinated.

On May 1, the Nevada Gaming Control Board will have the authority to set casino floor capacity limits. The current state-mandated capacity is 50 percent.?

Earlier this month, gaming regulators said they will look at the effort to vaccinate hospitality employees when deciding whether to boost the capacity limit.

State regulation also reminded casino operators that their gaming license is a revokable privilege, not a right.